In this post, you will learn exactly what scalping in horse racing means and I am going to give you a live example to demonstrate by scalping on Betfair is a simple strategy for making money on horse racing.
You can leverage the betting exchanges because the markets move incredibly fast, or slowly depending on your outlook, and you can make small ticks of profit with low risk.
What is scalping in horse racing
Scalping is a strategy where you leverage short-term price movements on the betting exchanges between two price points.
The profits are small because the trade happens between two opposing price point, but the bets are matched very quickly, allowing traders to nip in and out of a market at minimum risk and "scalp" out small profits each time.
Each day there are 20+ races in the UK races alone, never mind Ireland or other countries. This means there are literally 1000s of scalping opportunities per day as every 30 seconds within a market represents another opportunity to enter a scalping trade.
How to scalp a race
Before you enter a market to try and scalp, you need to find the right type of market. Handicap races are different from maiden races, for example, in terms of liquidity and market flow. Maiden races can be very volatile, so they are not a good market to scalp on.
Scalping requires a robust and steady market, usually a handicap race or a bigger event, such as the Cheltenham festival, where is is a lot of money being matched in the market.
This video will give you a clear tutorial on how to scalp and what it means to scalp a horse race.
Tips for successful scalping
Patience and maturity are key when scalping the horse markets. You also need a calm and emotionally controlled mindset.
The idea is to get in an out of the market as fast as you can, the longer you have an open bet, the bigger the risk the price goes against you.
In the moments before you enter a market, you make a judgement call to say, "Is this the right time for me to scalp as the market conditions stand?" If it is, then you are entering with that reason.
The longer you leave a trade open, the greater the chance the market conditions will change and a your "reasons" for entering will no longer be valid.
So, in a nutshell, if you want to scalp successfully you MUST get in an out of the market as soon as you can.
Common mistakes when scalping
Trading with large stakes:
If you only have a bank of £1,000 you cannot trade with £500 stakes. The potential losses, even with a few ticks movement, are too big.
Once you enter a trade and each tick represents a £1 profit or loss, all it takes is a 10-tick move (£10 loss) and you have lost 1% of your bank in a matter of seconds, which is way too much.
If you have a couple of bad races then suddenly 5% of your bank has been lost in less than a few hours, which is not sustainable.
This leads to emotional trading...
The minute you enter a trade, you get a rush of adrenaline, as it is exciting and if you are a gambler by nature, you will find it exhilarating to trade.
This in itself can be an advantage but for most people it leads to trading emotionally and losing focus on the trade.
By scalping emotionally, you fall in love with the trade and your attention is no longer neutral/unbiased because you want to "make money".
Have you ever entered a trade and been so distracted by the potential loss or win that you forgot to look at the live TV feed of the race and you missed your horse rearing up and throwing off his jockey?
Meanwhile the price of your trade goes 15+ ticks against you in a flash and you are completely blindsided, angry and frustrated. All the while you could have avoided this mistake if you had not staked too much on the trade and lost focus on the overview of all market influences.
This leads to stubborn trading and being unwilling to let go...
Unwilling To Accept When They Are Wrong:
Beginner traders often "fall in love with a trade" and refuse to let go of their original position. I think we have all done this and it is important to recognise why this happens.
When you enter a market, you do so based on a certain set of marketing conditions, as I mentioned before, which could range from resistance points, a horse rearing up or a flattening market which you can scalp.
Whatever the reason that is why you entered the market at a certain entry point. The problem is these reasons change fast as market elements shifts and flips the market conditions in seconds.
When you "fall in love with a trade" you refuse to accept that these market conditions no longer apply once the market changes quickly.
Perhaps a bookmaker dumped £10,000 in liability is five separate £2,000 trades over the course of 60 seconds, which shifts the weight of money in one direction.
Perhaps you missed that the 5-minute mark had passed where all the full time traders enter the market which heavily increases the matched bet fill rate.
Regardless, the reasons do not matter because your emotions do not matter.
When you "fall i love with a trade" you are like a deer caught in the headlights, you do not move. The market goes against you and your losing position grows and grows.
A Better Understanding of What Scaling The Horse Market Means
I hope this post and short video tutorial has given you some insight into scalping the horse markets on Betfair.
Scalping is by no means an easy task, but it IS simple. A simple process which anyone can learn if they are willing to spend the time and energy needed to get the practical experience of a full time trader.
If you have any questions or concerns, then please do feel free to leave a comment below.